Arizona Legislature

Arizona State Senators assemble, Thursday, May 16, 2013, at the Capitol in Phoenix.

The state Court of Appeals on Tuesday blocked enactment of a new state law allowing candidates to take a lot more money from donors.

In a brief ruling, the three-judge panel essentially accepted arguments by the attorney for the Citizens Clean Elections Commission that there is reason to believe the sharply higher limits, approved earlier this year by the Republican-controlled Legislature, are illegal and must be halted immediately.

Judge Randall Howe, the presiding judge who signed the order, did not explain which of two legal theories advanced by Joe Kanefield he and his colleagues were accepting. He promised a full ruling later.

Most immediately, the order directs Secretary of State Ken Bennett, as the state's chief election officer, not to enforce the law. That immediately limits candidates to the lower figures that were in place prior to Sept. 13.

Less clear is what happens to the money above those limits that candidates accepted after the law took effect.

Kanefield said that, generally speaking, court rulings are retroactive. That would force candidates to refund anything they got above those limits.

But Tom Collins, the commission's executive director, said he's not going to be pursuing candidates -- at least not yet.

"Whatever somebody did in the preceding last month, they did it,'' he said. "It's done.''

Collins said he wants to wait for the court's written opinion before deciding whether to seek refunds for contributions. He said his most immediate concern is getting the word out to candidates that, beginning immediately, they should not take more money in fundraising events than the old law allows.

And Mike Liburdi, who represents the GOP legislative leaders, said this isn't the last word. He is weighing an immediate appeal to the state Supreme Court.

Tuesday's decision is a sharp rebuff for House Speaker Andy Tobin and Senate President Andy Biggs who argued lawmakers are free to alter -- or in some cases, abolish entirely -- limits on what candidates can take and donors can give.

The order most immediately blocks legislation that, until Tuesday, had allowed legislative candidates to take up to $4,000 for their campaigns from any one source. Instead, the old limits of $440 will now apply.

It also puts back in place a $14,688 limit on how much candidates can take from all PACs for any election, as well as a $6,390 lid on the amount any one individual or PAC can give to all candidates in any year. The legislation had abolished both caps.

The ruling comes just hours after Kanefield told the court that voters, in approving an optional public financing system in 1998, clearly wanted to curb the "corrupting influence'' of large contributions. Kanefield said that is why initiative authors took the donation limits then in place for candidates who choose to continue to run with private dollars and purposely reduced them by 20 percent.

What that means, Kanefield argued, is those limits on private dollars effectively were approved by voters. And the Arizona Constitution precludes legislators from tinkering with anything that has been voter enacted without a three-fourths vote, something this year's legislation did not get.

Liburdi said those private donation caps are unrelated to the voter-approved Clean Elections Act which set up a system that allows, but does not require, candidates for statewide and legislative office to get public dollars if they do not take private donations. He told the judges that lawmakers are free to alter the limits on private contributions with a simple majority vote to whatever figure they want, subject only to that 20 percent discount.

But Kanefield said allowing lawmakers to set the caps at whatever they want -- or remove limits entirely -- makes no sense and undermines the whole purpose of Proposition 200.

"When it comes to contribution limits, the goal is about preventing corruption and the appearance of corruption,'' he said.

Proposition 200 was approved in the wake of the AzScam scandal, a "sting'' operation where lawmakers were convicted of taking bribes and larger-than-permitted campaign donations in exchange for promoting legalized gaming. The language in the ballot measure also says voters believe the system of private donations "undermines public confidence in the integrity of public officials'' and "effectively suppresses'' the voices of the majority "in favor of a small number of wealthy special interests.''

The argument about the purpose of Proposition 200 is more than academic.

Kanefield told the court the old limits on how much candidates can take from individuals and political action committees are an integral part of Proposition 200 and the goal of voters in preventing corruption. And he told the judges that would make those old caps -- the ones lawmakers voted to override -- subject to the constitutional protections against legislative altering.

Liburdi, in attempting to keep the higher caps in place, told the judges they should consider a larger issue: When are campaign finance limits unconstitutionally too low.

He argued that legislators really had no choice but to raise the limits. He said the old caps on how much candidates could take from any one source likely violated their constitutional right to raise sufficient funds to wage effective campaigns.

Courts have said there can be some limit on donations to preclude corruption. But Liburdi said the new limits, as big a jump as they are over the old ones, are still low enough to meet the legal tests for preventing corruption.

"And the Clean Elections petitioners have provided us with no evidence whatsoever that there is any corruption risk with these limits,'' he told the judges.

Kanefield, however, said that's not the issue. He said the court simply has to look at the purpose of Proposition 200 and decide whether the changes in campaign limits that lawmakers enacted are "inconsistent, repugnant to that purpose.''

Bennett said he was not surprised by the ruling.

"I personally felt that the plaintiffs (who challenged the law) had some very good points,'' he said.

Bennett said he believes lawmakers could not legally increase available funding sources for privately financed candidates without running afoul of the constitutional provisions against tinkering with voter-approved measures. He said the only way that might have been acceptable is if legislators had also increased funding for those running with public dollars, something they refused to do.

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